Taguig City — Apartment Building

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Hello. We are an American husband and Filipina wife living in Acacia Estates, Taguig City, Metro Manila.

We have acquired a 100 sq/m lot in an excellent location from my wife’s grandmother, who owned it for many years. We intend to build a 16 unit apartment building that caters to lower income renters. Each unit will be a studio type. There is already tremendous demand for low cost housing in Metro Manila and this demand will increase even more at our location once Arca South, Metro Manila’s new CBD, is completed in 2020. Simply visiting the lot and taking pictures has spread the word in the neighborhood and generated inquiries from potential renters.

Each unit will rent for 6 k, generating a total cashflow of 96 k in the first year. We will also have a garage space that will generate additional income.

The Offer

The roughly 100 k in cashflow will be distributed as such: 50% to the project managers (my wife and I) and 50% to our investors. The cashflow payments to investors will last for 20 years. Without taking into account increased revenue from rental increases, this amounts to about a 50% return on the initial investment. But investors who invest at least 25 k will also receive their share of all rent increases for the first 10 years. Again, in the first 10 years, ALL RENT INCREASES WILL BE DISTRIBUTED TO INVESTORS. My wife and I will not take any additional profit from the rent increases. Our profit will remain fixed for the 10 year period. Considering the rising real estate and rental prices in Metro Manila, this could be very lucrative for our investors. At the end of the 10 year period, the 50/50 profit share will apply to any additional increases.

Why This Deal Structure?

For this project, the alternative to crowfunding is a bank loan. In order for my wife and I to generate the same cashflow we would receive in this deal structure, we would need to make a sizable down payment and accept a high interest loan. In this deal structure, we will generate good cashflow at the outset without the interest fees eating into our profit.

Please note: Investing in early stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. This platform is targeted solely at investors who are sufficiently sophisticated to understand these risks and make their own investment decisions. This information has not been approved as a financial promotion, and you must carry out your own due diligence.
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